MARKETING: Handling Customer Complaints

Column by Elena Vasconez

By Elena Vasconez, Mi Casa Resource Center, Denver

Posted
2/24/12

Last month, we talked about developing customer loyalty. This month, I want to go a step further and discuss how to handle customer complaints. John Avella in "Tips for Better Tips: Skills to Serve Better and Make More," said that “Customers won’t know how good your organization is until you make a mistake.” This is not the easiest part of the job but it could turn out to be the most rewarding. If you turn a complaint into a positive conclusion, chances are you will be creating a loyal customer.

Here are some statistics developed by TARP, a customer service research firm. If a customer has a minor problem and it is handled quickly, 95 percent will repurchase from that business; 82 percent will purchase again even if it is a major problem that has been resolved. If the problem is not resolved and the problem was a major one, only 14 percent will repurchase.

A complaint is a gift and an opportunity to show the customer how good your business really is. It also provides important information on how you can get better by changing a process or improving a procedure to prevent a repeat occurrence. Keeping track of complaints, therefore, becomes a very important function of the business owner.

Conversely, customers do not always complain, but customers do not forget their complaints. If a customer complaint goes unattended, the complaint may fester and pick up negative emotional spin. Be aware that approximately 80 percent of customers will not complain. They just will not come back, but they will tell, on average, 15-30 other people how bad your product or service is. In today’s world of instant information, a disgruntled customer can tell thousands of people through the Internet with a simple click of a button.

As we said before, it costs a business 4 to 5 times more to attract a new customer as it does to retain one. This statistic reinforces two important things about how to handle complaints properly: a) every employee needs to be aware, alert and conscious of his or her behavior, particularly body language while in the presence of a customer, and b) employees can read or hear the customer’s frustration and take preemptive actions to solve the issue while creating a loyal customer without the customer uttering one word or issuing a complaint.

On the other hand, the role of the small business owner is to always be aware and in tune with the customer’s needs and emotions. A customer may not verbally express his/her unhappiness, but customers will always show their emotions through their behavior, attitude and emotions. So, be alert, watch and listen for it.